Use the data from the following financial statements in the popup window, The co
ID: 2816593 • Letter: U
Question
Use the data from the following financial statements in the popup window, The company paid interest expense of $19,000
for 2017 and had an overall tax rate of 40% for 2017. Complete the statement of retained earnings for 2017, and determine the dividends paid last year
The distributed earnings is ??? <-----(PLEASE ANSWER THIS)
Partial Income Statement Year Ending 2017
Sales revenue
$349,800
Cost of goods sold
$141,900
Fixed costs
$43,000
Selling, general, and administrative expenses
$28,000
Depreciation
$46,100
Partial Balance Sheet 12/31/2016
ASSETS
LIABILITIES
Cash
$16,100
Notes payable
$13,900
Accounts receivable
$28,200
Accounts payable
$19,100
Inventories
$47,800
Long-term debt
$190,000
Fixed assets
$368,000
OWNERS' EQUITY
Accumulated depreciation (-)
$140,600
Retained earnings
Intangible assets
$82,000
Common stock
$132,000
Partial Balance Sheet 12/31/2017
ASSETS
LIABILITIES
Cash
$25,900
Notes payable
$11,800
Accounts receivable
$19,100
Accounts payable
$24,000
Inventories
$53,200
Long-term debt
$162,200
Fixed assets
$448,100
OWNERS' EQUITY
Accumulated depreciation (-)
Retained earnings
Intangible assets
$81,800
Common stock
$181,800
Partial Income Statement Year Ending 2017
Sales revenue
$349,800
Cost of goods sold
$141,900
Fixed costs
$43,000
Selling, general, and administrative expenses
$28,000
Depreciation
$46,100
Explanation / Answer
Solution:
Retained earnings as on 31/12/2016=16,100+28,200+47,800+368000-140600+82000-(13900+19,100+190000+1,32,000)=$46,500
Accumulated depreciation ( 31/12/2017)= $1,40,600+$46,100= $1,86,700
Retained earnings as on 31/12/2017= 25,900+19,100+53,200+4,48,100-1,86,700+81,800-(11,800+24,000+1,62,200+181,800)=$61,600
Retained earnings for 2017 is $61,600
Net income earned during the year (2017)= 3,49,800-1,41,900-43,000-28,000-46,100-19000)(1-0.40)=$43,080
Dividend paid during the year =opening retained earnings+ net income earned during the year - closing retained earnings
Dividend paid during the year(2017) = $46,500+$43,080-$61,600=$27,980
Distributed earning is $27,980
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